Facebook FTC settlement puts Zuck personally on the hook
The Daily Charge
Today is all about Facebook.
Facebook will be paying the price for its lax treatment of our data.
The company settled with the Federal Trade Commission for a record $5 billion.
Furthermore, CEO Mark Zuckerberg will be personally responsible for certifying that the company is following the terms of the settlement each quarter.
What you think?
$5 billion, is that enough?
It seems like a big number but is it enough?
On its own, right?
So we were looking into some context.
What did Facebook earn last quarter?
So it pulled in $15 billion in revenue.
The full revenue.
So $5 billion, that's a lot on its face, but when you compare it to revenue in a quarter this doesn't seem like that big a deal.
The question is whether Facebook is truly gonna change their privacy plans because of this.
What is this gonna mean for Facebook products?
And Mark Zuckerberg had his own post explaining.
If we're trying to comply with this kind of privacy, it might take us a little longer to come out with products.
Which isn't a bad thing,
Yeah which is okay
We're fine with that.
I think that that speaks to the mentality of the companies.
You know, they always they do famous for sort of move fast break things mentality.
And they're starting to realize maybe that's not the best idea when you're dealing with so much of our personal information
As this company gets bigger and bigger and bigger.
There's gonna be all kinds of ways to try to get apps out.
The idea of growth versus responsibility, it's a huge thing here.
So Facebook already has, I don't even know if it's a critical mass people yet.
So the fact is the more we keep seeing bad news about them, I'm curious about whether this is going to point to lead to people going, I'm not using the service anymore, I'm afraid.
Do you think this will have any stigmatizing effect any further on Facebook?
So, so far there hasn't actually been an effect, right?
Their users continue to grow and we'll actually get more insight into this later today.
Facebook reports its quarterly earnings results
after the bell.
So we'll see if the growth has continued.
But for whatever reason, it seems like they've been relatively controversy proof.
Like there's been a lot of talk.
You're seeing all this pressure from government, from regulators.
All around the world, but in terms of their actual user base, it continues to grow, which is kind of a fascinating contradiction.>> Do you think that people aren't noticing this or they just don't care?>> It's a little both, for sure.
I think people generally get that maybe they're giving up too much information to Facebook, but they also know that.
It's oftentimes the only way to connect with folks around the world, relatives, friends, and it's become almost too important to give up.
Yeah, it seems like Facebook, some people has become the Internet and they don't want to lose it at all.
Because it's how they stay in touch with everybody.
The idea that there's an Internet outside of Facebook.
It's like the old AOL days where people were, you can go outside of this?
But then again, Facebook, could be for some people, is everything to some people.
So it's interesting, what I found interesting was this, the hook that they basically made.
They put Zuckerberg on the hook personally for certifying these these privacy.
Policies that the FTC's mandating are actually being put in place every single quarter that potentially leaves him up to personal liability, which is unusual for these kinds of settlements.
Usually, executives are insulated from personal liability.
That explains why on Zuckerberg's post on Facebook it said that he's setting up a new privacy committee on the board.
They're also gonna get a experienced product leader to take on the chief privacy officer.
So what he's going to do is make sure that everybody around him is privacy conscious because if he, if he's started, something goes wrong, he's in a lot of trouble.
So he's building this layers of hopefully, well, intelligent people that are willing to slow production down to make sure privacy is important.
That will keep Zuckerberg out of the line of fire.